New York City's affordable housing stock will get a boost from Bank of America Corp. and Citigroup Inc. as part of settlements resolving mortgage-bond practices that led to the 2008 financial crisis.
New York Attorney General Eric Schneiderman will announce a deal Wednesday under which the banks will provide $75 million to build or rehabilitate 2,200 rental units in the city and 1,500 elsewhere in the state. The money, which would be used to fund low-interest loans, will count as "consumer relief" that the banks pledged to provide under multibillion-dollar national settlements last year.
"New Yorkers were hurt in many ways by the housing crisis," Schneiderman said. "My office has been creative in finding new ways to help New Yorkers recover."
New York Mayor Bill de Blasio has pledged to build or preserve 200,000 affordable units to help ease the crunch in a city known for soaring housing prices and limited supply. About 64 percent of the 3.4 million housing units in New York City are rentals, according to city survey data.
Schneiderman, a Democrat, said his plan is aimed at those "hardest hit" by the 2008 housing crash, people who lost their homes to foreclosure and moved into rentals.
Bank of America and Citigroup reached $16.7 billion and $7 billion settlements, respectively, last year to resolve federal and state probes into mortgage-backed securities practices in the lead-up to the crisis. New York was allocated almost $1 billion from the accords, including about $600 million in promised consumer relief.